cvs/pharmacy - cushman & wakefield of san diego, inc. · 4 cushman & wakefield cvs/pharmacy...

CVS/pharmacy5526 S. CONGRESS AVENUE | AUSTIN . TEXAS

NATIONAL NET LEASE GROUP | OFFERING MEMORANDUM

OFFERING MEMORANDUM

BRANDON PRICECapital Markets858 558 [email protected]

BLAKE TAGMYERDirector858 558 [email protected]

INVESTMENT SUMMARY

TENANT OVERVIEW

MARKET OVERVIEW

010203

Listed in conjunction with Texas Broker of Record: Ran Holman, Managing PrincipalCushman & Wakefield of Texas, Inc.

TRAVIS TRAUTVETTERExecutive Managing Director858 558 [email protected]

CVS/pharmacy5526 S. CONGRESS AVENUE | AUSTIN . TEXAS 78745

CVS/pharmacy . AUSTIN TEXAS 5CUSHMAN & WAKEFIELD4

THE SUBJECT PROPERT Y IS A 13,013 SQUARE FOOT CVS LOCATED IN AUSTIN, TE XAS. CVS SIGNED A 25 YEAR LEASE WHICH COMMENCED IN 2007, LEAVING APPROXIMATELY 15 YEARS REMAINING ON THE TENANT’S INITIAL LEASE TERM.

The lease is absolute net providing for zero landlord responsibilities. CVS, which is publicly traded on the New York Stock Exchange under the ticker symbol “CVS”, has a current BBB+ credit rating by Standard & Poor’s and reported annual revenues in excess of $177 billion in 2016.

Located at the signalized intersection of South Congress Avenue and Stassney Lane, the subject property is positioned along two of the area’s main traffic arteries, just west of Interstate 35, with combined daily traffic counts exceeding 47,800 vehicles. CVS is situated approximately a half mile west of Stassney Heights, a 241,000 square foot center anchored by Lowe’s. Other national retailers in the immediate area include O’Reilly Auto, Aaron’s, AutoZone, Shell, Regal Cinemas and numerous others. Less than five miles from downtown Austin, the surrounding area is densely populated with over 144,000 residents within a three mile radius and over 300,000 residents within a five mile radius.

INVESTMENTOFFERING


INVESTMENTHIGHLIGHTS

A B S O L U T E NE T L E A S E S T R U C T UR E Zero landlord responsibilities for operating or capital expenses

C O R P O R AT E B AC K E D LO N G T E R M L E A S ECVS signed a 25 year lease in April of 2007 leaving approximately 15 years remaining on the initial lease term

B B B + C R E D I T R AT IN G BY S TA NDA R D & P O O R ’S Tenant is publicly traded on the NYSE and reported annual revenues in excess of $177 billion in 2016

P O SI T I O NE D J U S T W E S T O F IN T E R S TAT E 3 5 A ND S TA S S NE Y HE I G H T S 241,000 square foot retail center anchored by Lowe’s

F I V E MIL E S F R O M D OW N TOW N AU S T IN Over 144,000 residents within three mile radius and over 300,000 residents within five mile radius

SI GN A L IZ E D H A R D C O R NE R LO C AT I O N W I T H D RI V E-T HR U A ND MINU T E C L INI C Combined daily traffic counts exceed 47,800 vehicles


Note: Tenant's lease contains a three year rent holiday at the end of the initial lease term. Seller is offering a credit to Buyer at closing to offset rent holiday. Calculation above is reflective of the NPV of rent holiday at a 6.00% discount rate.

FINANCIALHIGHLIGHTS

13,013 SF RENTABLE BUILDING AREA

$7,127,168 EFFECTIVE PRICE

15 YEARS LEASE TERM REMAINING

6.08% EFFECTIVE CAP RATE

L E AS E T Y P E Absolute Net

L E AS E GUA R A N TO R Corporate Guarantee

OW N E R S H I P T Y P E Fee Simple

Y E A R B U I LT 2006

L E AS E C O M M E N C E M E N T 4/1/2007

L E AS E E X P I R AT I O N 1/31/2032

LOT S I Z E 1.975 Acres +/-

R E N E WA L O P T I O N S Ten 5-Year Options

R E N T I N C R E AS E S Between Options

BASE RENT SCHEDULEP E R I O D A N N UA L BAS E R E N T M O N T H LY BAS E R E N T

Current - 1/31/2032 $433,287.96 $36,107.33

Option 1 (5 Years) $389,959.16 $32,496.60

Option 2 (5 Years) $389,959.16 $32,496.60

Options 3 - 10 Fair Market Value Fair Market Value

P R I C E $7,737,285

CA P R AT E 5.60%

N P V O F R E N T H O L I DAY $610,117

E F F EC T I V E P R I C E $7,127,168

E F F EC T I V E CA P R AT E 6.08%


PORTFOLIOOVERVIEW

AS S E TS A R E AVA I L A B L E I N D I V I D UA L LY O R AS A P O R T FO L I O

P O R T F O L I O

LOCATION REMAINING LEASE TERM PRICE CAP RATE

01 | Buffalo NY 15 Years $8,547,789 6.02%

02 | Phoenix AZ 15 Years $7,624,002 6.02%

03 | Austin TX 15 Years $7,167,168 6.08%

04 | Winchester VA 15 Years $6,862,679 6.14%

05 | Columbus IN 15 Years $6,861,271 6.20%

06 | McDonough GA 16 Years $6,322,265 6.11%

07 | Flower Mound TX 15 Years $6,231,219 5.96%

08 | Phoenix AZ 15 Years $4,858,495 5.96%

09 | Kansas City MO 15 Years $4,856,944 6.14%

10 | Roanoke VA 15 Years $4,636,319 6.14%

11 | Silsbee TX 15 Years $4,355,776 6.32%

12 | Castle Hayne NC 16 Years $4,161,111 6.32%

13 | Abilene TX 15 Years $4,033,660 6.14%

14 | Green Bay WI 15 Years $3,906,547 6.14%

15 | Blakely GA 15 Years $2,813,777 6.55%

Note: Pricing reflected above is based on effective price and cap rates accounting for the NPV credit.

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www.cvshealth.us

CVS HEALTH CORPORATION, TOGETHER WITH ITS SUBSIDIARIES, PROVIDES INTEGRATED PHARMACY HEALTH CARE SERVICES.

It operates through Pharmacy Services and Retail/LTC segments. The Pharmacy Services segment offers pharmacy benefit management solutions, such as plan design and administration, formulary management, Medicare Part D services, mail order and specialty pharmacy services, retail pharmacy network management services, prescription management systems, clinical services, disease management programs, and medical pharmacy management services. This segment serves employers, insurance companies, unions, government employee groups, health plans, managed Medicaid plans and plans offered on public and private exchanges, other sponsors of health benefit plans, and individuals under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS Pharmacy, CVS Specialty, Accordant, SilverScript, NovoLogix, Coram, Navarro Health Services, and Advanced Care Scripts names.

As of December 31, 2015, it operated 24 retail specialty pharmacy stores, 11 specialty mail order pharmacies and 5 mail order dispensing pharmacies, and 83 branches for infusion and enteral services. The Retail/LTC segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, personal care products, convenience foods, seasonal merchandise, and greeting cards, as well as provides photo finishing services. It operates 9,655 retail stores in 49 states, the District of Columbia, Puerto Rico, and Brazil primarily under the CVS Pharmacy, CVS, Longs Drugs, Navarro Discount Pharmacy, and Drogaria Onofre names; online retail pharmacy Websites; and 32 onsite pharmacy stores, long-term care pharmacy operations, and retail health care clinics.

The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was founded in 1892 and is headquartered in Woonsocket, Rhode Island.

TENANTOVERVIEW

OWNERSHIPPublic

TICKER SYMBOLCVS (NYSE)

CREDIT RATINGBaa1 (Moodys)

# OF EMPLOYEES155,000

$82.43BILLION

M A R K E T C A P

$177.53BILLION

R E V E N U E


Austin is the capital of Texas and the seat of Travis County. Located in Central Texas, Austin is the 11th-most populous city in the U.S. and the fourth-most populous city in Texas. Austin the fastest growing of the largest 50 U.S. cities.

Austin is also the second largest state capital in the United States, after Phoenix, Arizona. The city is the cultural and economic center of the Austin–Round Rock metropolitan area, which had an estimated population of 2,064,149 as of June 1, 2016. The city is home to development centers for many technology corporations; it adopted the "Silicon Hills" nickname in the 1990s. However, the current official slogan promotes Austin as "The Live Music Capital of the World", a reference to the many musicians and live music venues within the area, and the long-running PBS TV concert series Austin City Limits. In recent years, some Austinites have also adopted the unofficial slogan "Keep Austin Weird". Austin is known as a "clean-air city" for the city's stringent no-smoking ordinances that apply to all public places and buildings, including restaurants and bars.

MARKETOVERVIEW


U.S. NEWS & WORLD REPORT NAMED AUSTIN THE BEST PLACE TO LIVE IN THE U.S. IN 2017

Austin is home to Fortune 500 corporations, emerging technology and biotechnology companies, and a highly-educated resident base. The city offers unique attractions and world-class museums, numerous outdoor activities including a diverse art scene and renowned festivals such as South by Southwest (a convergence of original music, independent films, and emerging technologies), one-of-a-kind shopping experiences, cultural heritage events, and a vibrant nightlife.

According to Travel & Leisure magazine, Austin ranks No. 1 on the list of cities with the best people, referring to the personalities and attributes of the citizens. Austin is considered to be a major center for high tech. Thousands of graduates each year from the engineering and computer science programs at the University of Texas at Austin provide a steady source of employees that help to fuel Austin's technology and defense industry sectors. Austin's largest employers include the Austin Independent School District, the City of Austin, Dell, the U.S. Federal Government, Freescale Semiconductor, IBM, St. David's Healthcare Partnership, Seton Family of Hospitals, the State of Texas, the Texas State University, and the University of Texas at Austin. Other high-tech companies with operations in Austin include 3M, Apple, Amazon, Cisco Systems, Dropbox, eBay, PayPal, Oracle, Polycom, Qualcomm, Inc., RetailMeNot, Rooster Teeth, Samsung Group, Silicon Laboratories, and Xerox. The proliferation of

technology companies has led to the region's nickname, "the Silicon Hills", and spurred development that greatly expanded the city.

Austin is also emerging as a hub for pharmaceutical and biotechnology companies; the city is home to about 85 of them. The city was ranked by the Milken Institute as the No.12 biotech and life science center in the United States. Companies such as Hospira, Pharmaceutical Product Development, and ArthroCare Corporation are located there.

Whole Foods Market is an upscale, international grocery store chain specializing in fresh and packaged food products—many having an organic-/local-/"natural"-theme. It was founded and is headquartered in Austin. Other companies based in Austin include Freescale Semiconductor, GoodPop, Temple-Inland, Sweet Leaf Tea Company, Keller Williams Realty, National Western Life, GSD&M, Dimensional Fund Advisors, Golfsmith, Forestar Group, and EZCorp. In addition to national and global corporations, Austin features a strong network of independent, unique, locally owned firms and organizations.

Much more than the "Live Music Capital of the World," Austin is a place to live, work, play and invest. Since 2011, Austin has received more than 50 local and national rankings in environmental leadership and education to quality of life and economic growth.

2016 1 Mile 3 Miles 5 MilesTotal Population 19,421 144,156 301,222

Median Age 31.5 31.9 32.3

Housing Units:

Total Housing Units 8,301 58,924 131,826

Occupied Housing Units 98.7% 97.9% 96.2%

Vacant Housing Units 1.3% 2.1% 3.8%

Household Income:

Income $0 - $49,999 56.34% 53.07% 47.22%

$50,000 - $99,999 32.28% 32.68% 32.65%

$100,000 + 11.37% 14.25% 20.1%

Avg Household Income $56,568 $62,313 $74,346

AREADEMOGRAPHICS

WITHIN 5 MILES301,000+ RESIDENTS

WITHIN 5 MILES$74,346 AVG INCOME

2021 1 Mile 3 Miles 5 MilesTotal Population 20,152 150,083 319,592

Median Age 32.2 33.0 33.5

Housing Units:

Total Housing Units 8,849 62,065 141,624

Occupied Housing Units 98.9% 98.0% 96.2%

Vacant Housing Units 1.1% 2.0% 3.8%

Household Income:

Income $0 - $49,999 50.78% 47.60% 41.455

$50,000 - $99,999 32.61% 32.46% 31.89%

$100,000 + 16.60% 19.93% 26.66%

Avg Household Income $65,056 $72,171 $86,682

POPULATION TREND

1 Mile 3 Miles 5 Miles

2016 19,421 144,156 301,222

2021 20,152 150,083 319,592

2016 TO 2021 CHANGE 3.8% 4.1% 6.1%


AREAAMENITIES

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E. STASSNEY LANE

W. STASSNEY LANE35

CUSHMAN & WAKEFIELD20

This Offering Memorandum is confidential and is furnished to prospective purchasers of the Property described herein subject to the terms of the Confidentiality Agreement previously provided to and executed by such prospective purchasers. This Memorandum is intended solely to assist prospective purchasers in their evaluation of the Property and their consideration of whether to purchase the Property. It is not to be used for any other purpose or made available to any other person without the prior written consent of the Seller of the Property.

This Memorandum was prepared on the basis of information available to the Seller and to Cushman & Wakefield, Inc., the Seller’s exclusive agent in connection with the sale of the Property. It contains pertinent information about the Property and the surrounding area but it does not contain all the information necessary for a complete evaluation of the Property. The projected cash flow and other financial information contained herein are for reference only.

Although the information contained in this Memorandum is believed to be accurate and reliable, neither the Seller nor its exclusive agent guarantees its accuracy or completeness. Because of the foregoing and because the Property will be sold on an “as is” basis, prospective purchasers should make their own independent assessments, investigations, and projections regarding the Property. Although additional material, which may include engineering, environmental, or other reports, may be provided to certain prospective purchasers as appropriate, such parties should confer with their own engineering and environmental experts, counsel, accountants and other advisors.

The Seller expressly reserves the right, in its sole discretion, to reject any offer to purchase the Property or to terminate any negotiations with any party at any time, with or without notice. The Seller shall have no legal commitment or obligation to any prospective purchaser unless and until a written Purchase and Sale Agreement has been fully executed and delivered and any and all conditions to the Seller’s obligations thereunder have been fully satisfied or waived.

The Seller is responsible for any commission due its agent in connection with a sale of the Property. The Seller shall not be responsible for any commission claimed by any other agent or broker in connection with a sale of the Property. No other party, including the Seller’s exclusive agent, is authorized to make any representation or agreement on behalf of the Seller. This Memorandum remains the property of the Seller and its exclusive agent and may be used only by parties approved by the Seller and its exclusive agent. No portion of this Memorandum may be copied or otherwise reproduced or disclosed to anyone except as provided herein and as permitted by the express terms of the Confidentiality Agreement.

STATEMENT OF CONFIDENTIALITY + CONDITIONS

BRANDON PRICECapital Markets858 558 [email protected]

BLAKE TAGMYERDirector858 558 [email protected]

TRAVIS TRAUTVETTERExecutive Managing Director858 558 [email protected]

DOWNLOAD A PRINTABLE VERSION HERE

https://www.dropbox.com/s/nhzaku0qcvilj5m/CVS%20Austin%20OM.pdf?dl=0

cvs/pharmacy - cushman & wakefield of san diego, inc. · 4 cushman & wakefield cvs/pharmacy...

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